MW Beacon Roofing sees 'headwinds' from tariffs and labor jitters from building contactors

By Steve Gelsi

CEO tells MarketWatch the company will continue to grow in 2025 despite Washington policies and a proxy battle with

Beacon Roofing Supply's Chief Executive Julian Francis said the industrial distribution company faces economic uncertainties around tariffs and potential labor shortages from a crackdown on illegal workers, but he still expects the business will grow in 2025.

"There are a lot of headwinds in the market," Francis told MarketWatch.

The company is also facing a proxy battle this spring over its ownership after it rejected an $11 billion takeover offer from QXO Inc. (QXO) as too low.

The Trump administration's effort to levy tariffs is expected to drive inflation, while its efforts to stem immigration worry the labor market and roofing contractors that participate in it, he said.

Beacon Roofing's stock (BECN) was unchanged in premarket trading on Thursday.

For full-year 2025, Beacon Roofing is projecting net income of $352 million to $412 million, compared with 2024's net income of $361.7 million. Analysts surveyed by FactSet expect 2025 net income of $493 million.

While single-family starts and existing-home sales demand will likely be sluggish in 2025, nonresidential repair and reroofing demand is expected to improve and offset soft new construction, the company said.

Beacon Roofing's fourth-quarter earnings of $1.32 a share fell short of the FactSet consensus estimate of $1.65 a share. Fourth-quarter revenue rose to $2.404 billion from $2.3 billion in the year-ago quarter, but missed the analyst estimate of $2.43 billion.

Despite a challenging economic environment in 2024, Francis said the company managed to set records for fourth-quarter and full year sales, as well as adjusted fourth-quarter earnings before interest, taxes, depreciation and amortization.

"We held our guidance all year - not many industrial distribution companies did that," Francis said

During the quarter, Beacon Roofing's business performed well in October but weakness crept into the market in November and December, he said

While optimism surged in 2024 around lower interest rates, mortgage interest rates didn't fall and new-home construction was sluggish, Francis said.

However, Beacon Roofing managed to hit its financial targets laid out to Wall Street - something that most other industrial distributors weren't able to do, Francis said.

Even though the company missed Wall Street's projections, "it's hard to say it was a bad quarter," Francis said.

Only about 20% of the company's revenue is from new construction, with the rest focused on roof updates, repairs and replacement.

That larger chunk of the company's business remains robust, as the number of buildings in the U.S. continues to increase every year, Francis said.

Based in Herndon, Va., Beacon Roofing distributes residential and nonresidential roofing materials. It also distributes siding, windows, insulation and waterproofing systems for building exteriors.

Ahead of Thursday's trading, Beacon Roofing's stock has risen 14.2% in 2025 while the S&P 500 SPX has risen about 1.3%.

Also read: QXO touts AI advantage in bid to win over Beacon Roofing shareholders

-Steve Gelsi

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February 27, 2025 09:03 ET (14:03 GMT)

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